The Little D Corporation has $150 in current earnings and profits and $100 in accumulated earnings and

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The Little D Corporation has $150 in current earnings and profits and $100 in accumulated earnings and profits. It makes a $400 distribution to its sole shareholder whose stock basis is $100.What are the shareholder’s tax consequences?

a. $250 dividend

b. $250 dividend; $50 capital gain

c. $250 dividend; $100 capital gain

d. $400 dividend AppendixLO1

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Taxation For Decision Makers 2008

ISBN: 9780324654110

2nd Edition

Authors: Shirley Dennis-Escoffier, Karen A. Fortin

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